Market-Ready: Concerns in Authentication and Appraisal of Russian Art

April 21, 2020

By Yulianna Vertinskaya.

In January 2020, art collectors Igor and Olga Toporovski were arrested in Belgium on suspicion of handling stolen goods, fraud and money laundering.^[1] The couple came under scrutiny in 2017, due to their involvement in the loan of artworks to the Museum voor Schone Kunsten in Ghent, Belgium for an exhibition entitled “Russian Modernism 1910–30.” The exhibition featured the works loaned by the Dieleghem Foundation set up by Igor Toporovsky and allegedly attributed to Kazimir Malevich, Alexander Rodchenko, Vladimir Tatlin, Wassily Kandinsky, and others.^[2] The authenticity of the items have been publicly challenged by dealers, curators and art historians in an open letter published in the Flemish newspaper De Standaard on January 15, 2018.^[3] Shortly thereafter, the Museum shut down the exhibition and the works were placed in museum storage. Toporovski’s case shows an evolving trend in exhibiting and selling Russian art that is not authentic.

The fact is that artworks by prominent Russian avant-garde artists are sought after and sell well, with works by Chagall, Malevich, and Rodchenko leading sales. The size of the Russian art market abroad being relatively small, it is very sensitive to new works entering the market. With high demand and limited supply, the risk of fake or misattributed works is prominent, making authentication and expertise paramount.

The Market For Russian Art

As evidenced the leading London auction houses’ sales results of November 2019, Russian art remains at the forefront of international art sales. Last year, Christie’s marked the 50th anniversary of their first sale of Russian Art by offering 200 lots with sale total approaching £11 million (including buyer’s premium).^[4] Christie’s November “Important Russian Art” sale included, among others, the magnificent portrait “The Manicure. Portrait of Mademoiselle Girmond” (1917) by Nicolai Fechin, sold for £2,291,250, Russian landscape “Pine Forest” (1897) by Ivan Shishkin, sold for £1,031,250, seascape “Sunset over Ischia” (1873) by Ivan Aivazovsky, sold for £491,250 and works by the group Peredvizhniki (“the Itinerants,” an important collective of Russian realist artists in the 19^th century), as well as a variety of exquisite objets d’art by Fabergé.^[5] The history of Christie’s Russian Art Team, currently headed by Alexis de Tiesenhausen, began with the first department of Russian art in Geneva in 1969, and the first Russian auction that took place the following year. Christie’s ties to Russia “stretch back to the 18th century, when James Christie famously negotiated the sale of Sir Robert Walpole’s collection to Empress Catherine II. In 1934, Christie’s pioneered the Fabergé market with the first dedicated sale at King Street premises, and Russian art has been a regular feature in Christie’s auction rooms ever since.”^[6]

Not to be outdone, Sotheby’s sale in November 2019 also boasted noteworthy results (bringing in a total of £18.1million) with more than 100 Russian art lots including “Still life with jug and icon” (1910-1912) by Mikhail Larionov, sold for £1,500,00, and “Reclining Nude” by Nicolai Fechin, sold for £450,000. Record prices were set with Ivan Kliun’s “Spherical Suprematism,” sold for  £4,900,000 and Konstantin Yuon’s ”The Ancient Town of Uglich,” sold for £1.300,000.^[7] Sotheby’s Russian department, headed by Reto Barmettler, remains the clear market leader in the category of Russian paintings. Sotheby’s held the first and the last foreign auction of Russian Avant-Garde and Contemporary Soviet Art in Moscow in 1988, initiated by the auctioneer Simon de Pury, approval for which was granted by the Soviet Government, then under leadership of Mikhail S. Gorbachev.^[8] Over 100 lots of Russian art including “unofficial” art were offered to international collectors and were sold for foreign currency only. The record price was set for abstract painting “Liniya” (1922) by Alexander Rodchenko, sold for £330 000.

Authentication of Russian Art

In June 2013, Israeli art dealer Itzhak Zarug and his business partner Moez Ben Hazaz were arrested for the sale of suspected forgeries of Russian avant-garde art found in apartments and warehouses across Germany. “There is a huge problem with forgeries in the field of the Russian avantgarde” says Andrei Nakov, a Paris-based art historian.^[9] “This is a field of art history which was censored for decades, and where archives were often destroyed. Rebuilding knowledge about this field will take a long time, and the money involved is threatening to destroy that process.”^[10]

The practice of art authentication has its flaws worldwide and Russia is not an exception. A work’s value is based on its authenticity and yet there are few protections for collectors. The principle of caveat emptor (buyer beware) is still dominant in the international art market. As such, the buyer generally bears a risk of any problem with the quality of a work and is responsible for verifying that the condition and authenticity of a work is as advertised and offered.

Regulation of Art in Russia

In accordance with the classification under the Civil Code of the Russian Federation, artworks are treated as objects subject to the general rules for commercial transactions.^[11] Artworks, including those that could be classified as cultural property, represent res in commercio, i.e. items that are free to circulate in commerce. Any restrictions on the movement of such goods may be imposed in accordance with federal law and if necessary to ensure people’s safety, protect life and health, or to protect items of natural and cultural value.^[12] Russian customs rules and the Federal Law “On Import and Export of Cultural Valuables,” as amended, regulate aspects of export and import of cultural valuables.^[13]

Appraisal of Russian Art

Artworks are not an ordinary commodity as they are often subject to authenticity and appraisal concerns. However, no regulatory guidance for art appraisal exists in Russia.

Art appraisal is aimed at, among other things, establishing market value of works of art. The Russian Federal Law on Appraisal was enacted in 1998.^[14] Since then, various amendments and regulations, including federal appraisal standards, came into force. The official appraisal can be performed only by certified appraisers, who must have specialized education, be a member of a self-regulatory organization and secure professional liability insurance.^[15] Federal Appraisal Standards (“FAS”) contain mandatory recommendations on appraisal of intangible assets and intellectual property, but, as of today, there is no mandatory FAS specific to artworks and antiques.

To that end, in 2011, the Chamber of Commerce and Industry of the Russian Federation issued Methodological Recommendations on the Appraisal of Artworks, including antiques of both Russian and foreign origin.^[16] The Recommendations on the Appraisal of Artworks are consistent with the Federal Law “On Technical Regulation,”^[17] the Federal Law “On Protection of Consumer Rights”^[18] and the Law “On Appraisal Activities in the Russian Federation” and should be followed by art market stakeholders.

In the United States, it is often said that the authentication process is a “three legged stool” that relies on connoisseurship of the artist’s history and style, provenance (the history of ownership and conservation), and scientific assessment of the work. Russia’s Recommendations on the Appraisal of Artworks specify an appraisal is to begin with authentication (atributziya), i.e. the expert’s opinion on the authorship (artist, art school, period etc.), followed by expertise (expertiza) of the artwork in question, including complex examination of works of art, which culminates in the expert’s statement. Both authentication and art expertise are commonly performed prior to any sale; forensic examinations represent a small percentage of the total number of examinations related to auctions and private sales and usually take place only as part of criminal investigation involving artworks.

The national standard of the Russian Federation entitled “Expertise of works of art. Paintings and Graphics. General requirements” came into force in 2017.^[19] While the Standard is not mandatory, it significantly helps in the appraisal process by establishing general requirements for the process. This includes guidance on contracts between a client and an expert, lists of information on the object undergoing expertise and guidance on the appropriate content and statements of an expert opinion.

In Russia as well as in other countries, there is no state-authorized entity that is empowered to issue a guaranteed authentication document. State museums are no longer authorized to render any services in the field of commercial expertise and authentication for art market stakeholders. However, it is not prohibited for museum experts and art connoisseurs to supply their personal opinions on an artwork’s authenticity. Whether an expert can be held accountable for such opinion on authenticity is a matted on continued debate. It is quite challenging to prove expert’s liability in court, but an expert may be liable for making deliberately false statements. In most cases, both in Russia and abroad, the reputation of an expert becomes one of the most important factors that lend confidence to their opinion. For example, in 2012, a criminal case was opened against Elena Basner, former curator of the 20th Century Art department of the Russian Museum in Saint-Petersburg, on suspicion of fraud in connection with the sale “In a Restaurant” (1913), a painting attributed to Boris Grigoriev.

The criminal case was initiated as a result of a claim by collector Andrey Vasiliev, who had purchased the painting for 7.5 million rubles (approximately $100,000). The expert was charged with providing a deliberately false statement of authenticity concerning the painting, but the court found that the evidence presented was insufficient and ordered that Basner be released.^[20] During trial, the expert for the defense claimed that Basner had made a mistake in good faith. Furthermore, it was argued that she did not provide official expertise regarding the painting in question but merely gave her personal opinion of Boris Grigoriev’s authorship. Two years after the sale, independent examination undertaken by the Russian museum and the Moscow Expert Center determined that the painting was not authentic.

“Whether the courtroom is the best place to decide whether an artwork is authentic or not”^[21] was raised in the case brought by Aurora Fine Arts (a company owned by the Russian billionaire Viktor Vekselberg) against Christie’s for doubts on authenticity of the painting “Odalisque” (1919), attributed to Boris Kustodiev.^[22] In 2012, the London High Court ruled that the Russian oligarch was entitled to recover the £1.7 million for painting bought at Christie’s London in 2005. Evidence presented during the hearing by experts from the State Russian Museum in St. Petersburg and pointed to the painting being fake, relying on connoisseurship, historical issues, and technical expertise. However, Christie’s conditions of sale barred the claimant’s negligence and misrepresentation claims.

Screenshot from Christie’s listing of “Odalisque” (1919), attributed to Boris Kustodiev.
Source: Christie’s.

The procedure of authentication and expertise may be time-consuming and costly, but it is necessary for the functioning of the blue chip art market where risk of misattributed works is high. At the same time, the cost of a comprehensive examination can be comparable to, and in some cases even exceed, the market value of the non-blue chip artworks to be appraised.

Whether the work was created by the identified author may also be assured by means of catalogue raisonné that is traditionally prepared by either an authentication board or a recognized expert in an artist’s oeuvre. It is a small wonder that catalogues raisonnés, monographs, publications, and exhibitions serve as a mainstream methods of “legalizing” artworks, i.e. inserting questionable works, fakes and forgeries in the art market through “official recognition.”^[23] Examples below show the overwhelming market appetite for 20^th century Russian art allegedly rediscovered, or privately owned and never exhibited before, and how experts strive to protect artists’ legacy and the art market’s purity.

In 2016, the Ministry of Culture of the Russian Federation prevailed in an arbitration court^[24] proceeding against British publisher Antique Collectors Club Ltd. in regard to the book “Goncharova: Art and Design by Natalia Goncharova” by Anthony Parton that was sold in Russia in 2015.^[25] The book contained reproductions of works by Russian artists N.S. Goncharova and her husband M.F. Larionov^[26] and was part of the scandal involving Goncharova’s catalogue raisonné entitled “Son oeuvre entre tradition et modernité” published by Denise Bazetoux in 2011. In his introduction to the book, Parton stated that it would not have been possible without large-hearted and enthusiastic assistance of the State Tretyakov Gallery and the State Russian Museum. This gives the impression of approval of the book’s entire contents by the largest Russian museums, which is not true. The State Tretyakov Gallery claimed that the book was “unscientifically based” and “incorrect” and provided no relation to real legacy of the artists.^[27] Works included in publications have been publicly challenged by art experts, collectors, and connoisseurs of Goncharova’ s legacy, who claim that there are issues regarding authentication and provenance. By decision of the arbitration court, the book “Goncharova: Art and Design by Natalia Goncharova” was withdrawn from sale within the territory of Russia.

Most recently, in February 2020, Tribunale di Milano cleared James Butterwick, a London-based Russian art dealer, of charges sounding in defamation, which were brought by the organizers of the exhibition, “Avangardie Russe dal Cubofuturismo al Suprematismo,” held in Mantua between November 2013 and February 2014.^[28] The ground of the claim was James Butterwick’s expressed opinion that exhibited works lack any provenance or exhibition history.

Conclusion

Good faith of stakeholders when buying and selling art is presumed. However, the art market is driven by passion and money and fraud is more prevalent than one might think. Buyers are vulnerable and need protection against misleading expert statements, misattribution, lack of provenance and price manipulation, art dealers suffer from buyers stoping to buy for lack of certainty and experts fear legal actions against them.

Recent cases underline that whenever works lack information about provenance and exhibition history, the only proof of their authenticity becomes dependent on connoisseurship and examination. Rebuilding of and knowledge sharing in Russian art through thorough art and historical analysis, compiling database of expert statements acknowledged by scholars, connoisseurs, publishing and making publicly available reliable catalogues raisonnés, use of latest scientific techniques and collaboration between Russian and foreign experts are of paramount importance.^[29]

Simultaneously, experts would be expected to waive conflicts of financial interest and to follow professional standards. The code of ethics must become the cornerstone for relationships between art dealers and experts since credibility largely depends on the public reputation of the profession.

Acknowledgment: This Article was edited with the help of Jana S. Farmer, partner at Wilson Elser and head of the Art Law Practice.

Endnotes:

1. Art collectors Igor and Olga Toporovski in custody, WRT NWS (Dec. 21, 2019,  1:38 PM), https://www.vrt.be/vrtnws/en/2019/12/21/art-collectors-igor-and-olga-toporovski-in-custody/. ↑
2. Simon Hewitt, The Art Newspaper’s exposé helps close dubious Russian avant-garde art display in Ghent museum, Art Newspaper (Jan. 29, 2018, 18:16 GMT), https://www.theartnewspaper.com/news/the-story-behind-the-dubious-russian-avant-garde-art-show-in-ghent-museum. ↑
3. The Art Newspaper, Fake Kandinskys, Malevichs, Jawlenskys? Top curators and dealers accuse Ghent museum of showing dud Russian avant-garde works. Art Newspaper (Jan. 15, 2018, 11:44 GMT) https://www.theartnewspaper.com/news/leading-curators-and-dealers; OLGA EN IGOR TOPOROVSKI OVER HUN COLLECTIE. DS De Standaard (Jan. 15 2018), https://www.standaard.be/cnt/dmf20180114_03299298. ↑
4. Christie’s auction results, https://www.christies.com/Results/PrintAuctionResults.aspx?saleid=28087&lid=1 (last visited Mar.7, 2020). ↑
5. Important Russian Art, https://www.christies.com/salelanding/index.aspx?intsaleid=28087&lid=1&saletitle= (last visited Mar.7, 2020). ↑
6. 50 years of Russian Art masterpieces at Christie’s, https://www.christies.com/features/50-years-of-Russian-art-at-Christies-9747-3.aspx, (last visited Apr.4, 2020). ↑
7. Russian Art at Sotheby’s | Auction Results, https://www.sothebys.com/en/series/russian-art (last visited Mar.7, 2020) ↑
8. Howell Raines, Soviet to hold art auction in pact with Sotheby’s. (Feb. 27, 1988), https://www.nytimes.com/1988/02/27/arts/soviet-to-hold-art-auction-in-pact-with-sotheby-s.html. ↑
9. Philip Olterman. Russian avant-garde forgery case ends in convictions and disappointments, The Guardian (Mar. 03, 2018, 05:00 GMT), https://www.theguardian.com/world/2018/mar/16/russian-avant-garde-forgery-case-conviction-german-trial-art-market. ↑
10. Id. ↑
11. Article 128 (Part I) of the Civil Code of the Russian Federation. Grazhdanskiy Kodeks Rossiiskoi Federatsii, Chast’ I [Civil Code of the Russian Federation, Part I], Dec. 8, 1994. N 238-239. ↑
12. Article 74(2) of the Constitution of the Russian Federation. The same provisions are restated under Article 1 (Part I) of the Civil Code of the Russian Federation which allows goods, services, and financial assets to move freely throughout the Russian Federation. Restrictions on the movement of goods and services may be imposed in accordance with federal law, if they are necessary to ensure safety, to protect people’s life and health, and to protect nature and cultural valuables. Konstitutziya Rossiiskoi Federatsii [Constitution of the Russian Federation], ROSSIISKAIA GAZETA [Ros.Gaz.], Dec.25, 1993. N 237; Grazhdanskiy Kodeks Rossiiskoi Federatsii, Chast’ I [Civil Code of the Russian Federation, Part I], Dec. 8, 1994, N 238-239. ↑
13. Federal’nyi Zakon RF o Vivoze i vvoze kulturnikh zennostei [Federal law of the Russian Federation On export and import of cultural valuables], ROSSIISKAIA GAZETA [Ros.Gaz.], May.15, 1993, N 92. ↑
14. Federal’nyi Zakon RF Ob ozenochnoiy deyatel’nosti [Federal Law of the Russian Federation on Appraisal Activities in the Russian Federation], ROSSIISKAIA GAZETA [Ros.Gaz.], Aug.6, 1998, N 148-149. ↑
15. Self-regulatory organization is non-profit organization created to regulate the appraisal activities and control the activities of its members in terms of their compliance with the requirements of this federal law on appraisal, rules of business and professional ethics (Article 22, Law on Appraisal Activities in the Russian Federation). ↑
16. STO Torgovo-Promishelnnaya Palata. 61-23-11, 2011. Ozenka stoimosti proizvedeniy iskusstva, v tom chisle antikvarnih izdelii. Metodichskiye rekomendazii. Systema standartizatsii Torgov-promishelnnoi palati Rossiiskoi Federatsii [STO Chamber of Industry and Commerce. 61-23-11. Appraisal of works of art, including antiques. Instructional guidelines. Standardization system of the Chamber of Industry and Commerce of the Russian Federation], 2011. ↑
17. Feredarl’nyi Zakon RF O Technicheskom regulirovanii [Federal law of the Russian Federation on Technical regulation], ROSSIISKAIA GAZETA [Ros.Gaz.], Dec. 31, 2002, N 245. ↑
18. Feredarl’nyi Zakon RF O zaschite prav potrebitelei [Federal law of the Russian Federation on Protection of consumer’s rights”], ROSSIISKAIA GAZETA [Ros.Gaz.], Apr. 7, 1992, N 15. ↑
19. GOST R 57424-2017 dated 01.09.2017. Natsionalniy standard Rossiiskoi Federatsii. Ekspertiza proizvedeniy isskustva. Zhipovis i grafika. Obschie trebovaniya. [GOST Р 57424-2017 dated 01.09.2017 National standard of the Russian Federation. Expertise of works of art. Paintings and Graphics. General requirements]. ↑
20. Opravdatelnii prigovor Dzerzhinskogo raiionnogo suda goroda Sankt-Peterburg ot 17.05.2016 goda po delu Andrei Vasilyev i Elena Basner № 1-9/2016 (1-40/2015;) po statye 159 (4) Ugolovnogo Kodeksa Rossiiskoi Federatsii, [Judgment of acquittal of the Dzerzhinsk district court of Saint-Petersburgh dated 17th of May 2016 in criminal case Andrey Vasiliev vs. Elena Basner № 1-9/2016 (1-40/2015;) 159 (4) of the Criminal Code of the Russian Federation]. ↑
21. Konstantin Akinsha, High Court Drama: Scholars, Christie’s, and the Russian Oligarch, (Feb. 5, 2013 7:00am), https://www.artnews.com/art-news/news/did-the-court-make-a-mistake-2177/. ↑
22. Avrora Fine Arts Investment Ltd v. Christie, Manson & Woods Ltd. [2012] EWHC 2198 (Ch). ↑
23. In 2018 the Rostov Kremlin Museum showed discovered fakes of Russian avant-garde art. https://www.rostmuseum.ru/events/vystavki/khvost-komety-proizvedeniya-levykh-khudozhnikov-nachala-xx-veka-v-sobranii-muzeya-rostovskiy-kreml/ (last visited Apr.4, 2020). ↑
24. In Russia arbitration courts are part of the Russian court system and are involved in setting commercial, business activity disputes between parties. ↑
25. Reshenie Arbitrazhnogo suda goroda Moskvi ot 24.06.2016 goda po delu А40-44111/2015 Ministerstvo Kulturi Rossiiskoi Federatsii i Antique Collectors Club Ltd, GUP goroda Moskvi “Ob’edinenniy zentr “Moskovskii dom knigi “, ООО “Internet Resheniya”, Antigue Collectors Club Ltd., [Decision of the Arbitration court of Moscow dated 24th June 2016 in case А40-44111/2015 Ministry of Culture of the Russian Federation vs. Antique Collectors Club Ltd, State Unitary Enterprise of city of Moscow “United center Moscow books house” , limited liability company “Internet solutions”, Antigue Collectors Club Ltd.] – Decision. ↑
26. In March 2020 the Ministry of Culture of the RF informed that all copyright for the works of Larionov and Goncharova artists will pass to Russia from the 1st of January 2021. Currently French Society of Authors of Graphic and Fine Arts (ADAGP) manages the copyright under agreement between Russia and ADAGP that is to expire on the 31st of December 2020. https://tass.ru/kultura/7916419 (last visited Apr.16, 2020). ↑
27. Decision. ↑
28. James Butterwick Wins Avant Garde Defamation Case. Categories: Faking in Russian Art, General, Press-Release (Feb. 29, 2018, 18:16 GMT), http://www.jamesbutterwick.com/2020/02/11/james-butterwick-wins-avant-garde-defamation-case/. ↑
29. London based Russian Avant-garde Research Project (RARP) is aimed to foster multi-disciplinary approaches to research into the Russian avant-garde and its context. http://www.rarp.org.uk/about/mission-and-vision/ (last visited Apr.17, 2020). ↑

Suggested Readings:

• Adam Lerner, From Russia With Doubt: The Quest to Authenticate 181 Would-Be Masterpieces of the Russian Avant-Garde, Princeton Architectural Press (October 29, 2013).
• Viktor Misiano, Andrei Kovalev, Andrei Erofeev, Mary-Angela Schroth and others, Exhibit Russia: The New International Decade 1986-1996 (Garage Archive Collection), Garage Museum of Contemporary Art (April 26, 2016).
• Adam Sage, ”Russia wants £16m artwork back after years of showing ‘poor’ fake,” The Times, (Nov. 14, 2018). Here.
• Konstantin Akinsha, “High Court Drama: Scholars, Christie’s, and the Russian Oligarch,” Artnews (February 5, 2013). Here.
• Russia Today, “Vekselberg wins Faberge case but receives only moral satisfaction,” (Aug 27, 2012). Here.
• Sylvia Hochfield, “Protecting Goncharova’s Legacy,” Artnews (July 1, 2011). Here.

About the Author: Yulianna Vertinskaya has been employed in the energy sector (currently renewable business) at a U.S.  company for approximately ten years and was recognized among the leading corporate lawyers by Legal500 – GC POWERLIST: RUSSIA 2017. She holds a Diploma in the doctrine of Russian Law (Civil and Corporate law – International institute of management ) as well as a Diploma in Common Law (University of London), and a Diploma in Compliance (International Compliance Association, London). Her main practice areas include private commercial law, corporate law, and compliance. In addition to her work in the energy sector, beginning in 2016, she focused her studies on legal issues pertaining to the art world, ad hoc sessions for students introducing the importance of compliance, cultural heritage preservation, as well as applicable criminal and civil law provisions. She publishes art law articles and currently pursues a further course of study in art history at the Stroganov Moscow State Academy of Arts and Industry.